The AZ61 magnesium alloy wires and sticks were prepared through multi-step hot rotary swaging, and the strength of AZ61 alloy is enhanced due to grain refinement and dynamic precipitation during rotary swaging process. The dynamic precipitation mechanism during hot rotary swaging is also discussed. The results show that the rotary swaged AZ61 alloys exhibited a high YS of 302MPa, a high UTS of 376MPa and a elongation of 7%. The means grain sizes in rotary swaged AZ61 alloy is 8μm. The dynamicly precipitated nanophases during rotary swaging process of AZ61 alloy include spherical Mg₁₇Al₁₂ particles (average size of 110nm, ~6.5 vol.%) and spherical Al₆Mn particles (average size of 10nm). The dynamic precipitation mechanism during rotary swaging process is as follows: rotary swaging is a high-frequency pulse forging process (the pulse forging frequency is between 1500 and 6000 strokes per minute) during which plastic deformation intervals altered with aging intervals. These crystal defects produced during plastic deformation such as dislocations and vacancies provided large amount of nucleation sites for precipitation. The aging interval during each pulse period is as short as 0.05s and hence the dynamic precipitate phases didn’t grow to a very large size.